I am just putting my immediate concerns in one email...Is there any difference between 2 story duplexes and 1 story duplexes, as in (being able to rent it, rental rates (less for one vs other), maintenance costs? 

If your lender won't lend to you because you walk away from an illegal, possibly dangerous, possibly costly situation, find another lender.

Mold is nasty and very dangerous.  

My biggest concern too is, what's to stop them from going around me and just purchasing it themselves without my help?

@Jonathan Gibson- that is definitely something I am concerned about here.

I would lean towards younger if you were able to tell their finances were in order.My only concern with the older tenant is that her history shows she redlines her finances, and with the average person history shows more about someone than just their willingness to change (think about how many new years resolutions go undone).

This issue has effected me widely and created a major safety concern if I want to drive for dollars  and look for properties . 

Are there any special concerns with HOAs I need to worry about?

I have bought sfrs at these before but I am wondering if anyone has purchased a condo or knows special concerns with condo foreclosures. 

I'm not too concerned about being able to rent the units out quickly once it's renovated.